Progressive rendering is just a different way to layout the pixel data. Embedding a thumbnail is storing two distinct images. In other words, progressive rendering should be more efficient space and bandwidth-wise.

The DC coefficients in a progressive JPEG are literally an embedded thumbnail (a 1:64 copy of the original) right? Is the question if the second "layer" replaces the thumbnail or layers corrections on top of it? It wasn't clear to me which AVIF does.